You should be more concerned about downpayment amounts (3% is acceptable, and some lenders will finance with 0%). This is what pushes home prices up artificially.
I had a foreclosure where I stopped making payments in 2011. My foreclosure finally completed in December of last year (4.5 years later). I already have lenders who will finance me on a new mortgage.
Yeah. Was speaking to a realtor yesterday actually about this (just an acquaintance) and homes in some areas in a particular midwest city have risen in value 23% in one year. As soon as a place goes on the market it has 10 offers over the asking price. This isn't good. But if you have a great job and good job security it is idiotic to not buy a house right now with the low interest rates assuming it's not way overpriced (and these can be found).
I purchased a home that costs about twice my annual salary. I think it's reasonable. I put 0 down and walked away with a check at closing after seller closing costs for some items I wanted repaired.
Anyway this is just my general commentary and my experience. I don't know enough about the market as a whole to make any real informed contribution, but just wanted to share anyway.
Note: Those are conventional financing limits. Anything above that ($417,000 nationwide, with exceptions as high as $625,500 in certain high-priced markets) is considered a "jumbo" loan, and is typically not government/GSE backed.
